CapitaLand Integrated Commercial Trust - Annual Report 2021

The valuations are sensitive to key assumptions on capitalisation rates, discount rates and terminal yield rates and any changes in the key assumptions could have a significant impact on the valuations. The valuation reports obtained from certain external valuers also highlighted that given the unprecedented set of circumstances on which to base a judgement, less certainty and a higher degree of caution, should be attached to their valuations than would normally be the case. Given the unknown future impact that the novel coronavirus (“COVID-19”) pandemic might have on the real estate market, the external valuers have also recommended to keep the valuation of these properties under frequent review. Our response : We evaluated the valuers’ objectivity and competency. We also discussed with the valuers their scope of work and basis of valuation to understand if any matters may have impacted their objectivity. We independently considered the valuationmethodologies applied by the valuers, comparing thesemethodologies to those applied by other valuers for similar properties. We compared the net income applied by the valuer to historical levels of net income. We also compared the capitalisation rates, discount rates and terminal yield rates against those applied by other valuers for similar properties, and analysed trends of these key inputs. Where the amounts and rates were beyond the expected range, we performed procedures to understand the reasons and drivers. We also discussed with the Manager and external valuers to understand how they have considered the implications of COVID-19 and market uncertainty in the valuations. We also considered the adequacy of disclosures in the financial statements in describing the inherent degree of subjectivity and the key assumptions used in the valuations. This includes the relationships between the key unobservable inputs and fair values. Our findings : The Group has adopted a structured process in selecting valuers and in considering and challenging the valuations derived. The valuers belong to generally-recognised professional bodies for valuers. The valuation methodologies applied were consistent with generally accepted market practices. The key inputs and assumptions were comparable to those used by other valuers of similar investment properties. The disclosures in the financial statements are proportionate to the degree of subjectivity inherent in valuations. Other information TheManager is responsible for the other information contained in the annual report. Other information is defined as all information in the annual report other than the financial statements and our auditors’ report thereon. We have obtained all other information prior to the date of this auditors’ report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Independent Auditors’ Report UNITHOLDERS OF CAPITALAND INTEGRATED COMMERCIAL TRUST (CONSTITUTED IN THE REPUBLIC OF SINGAPORE PURSUANT TO A TRUST DEED DATED 29 OCTOBER 2001 (AS AMENDED)) Annual Report 2021 215